Franklin BSP Realty Trust FBRT-PE

Franklin BSP Realty Trust, Inc. is a real estate finance company that has elected to be treated as a real estate investment trust for U S federal income tax purposes. The company conducts substantially all of its business through FBRT OP LLC and its subsidiaries, focusing on two business units: Commercial Real Estate Financing and Agency Business.

The company generates revenue by originating, acquiring and asset managing commercial real estate debt investments such as first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in those loans. It also invests in real estate securities including commercial mortgage backed securities, CMBS bonds, collateralized debt obligations and other securities. The company originates conduit loans that it intends to sell through its taxable REIT subsidiary into CMBS securitization transactions. It owns real estate acquired through foreclosure, deed in lieu of foreclosure or purchase for investment. Through its Agency Business unit, the company originates, sells and services multifamily finance programs sponsored by government sponsored enterprises such as Fannie Mae and Freddie Mac and government agencies such as Ginnie Mae and the Federal Housing Administration, retaining servicing rights on the loans it originates. The company also services external portfolios of commercial real estate financing products, earning fees from those activities.

The company operates through the following segments: Commercial Real Estate Financing and Agency Business.

• Commercial Real Estate Financing: This segment originates, acquires and asset manages commercial real estate debt investments, including first mortgage loans, subordinated mortgage loans, mezzanine loans and participations in such loans; invests in real estate securities such as commercial mortgage backed securities, CMBS bonds, collateralized debt obligation notes and other securities; originates conduit loans intended for sale into CMBS securitization transactions; and owns real estate obtained through foreclosure, deed in lieu of foreclosure or direct purchase.

• Agency Business: Through its subsidiary NewPoint, the segment originates, sells and services multifamily finance programs sponsored by government sponsored enterprises such as Fannie Mae and Freddie Mac and government agencies such as Ginnie Mae and the Federal Housing Administration; retains servicing rights on substantially all loans it originates and sells; is an approved Fannie Mae Delegated Underwriting and Servicing lender, a Freddie Mac Program Plus Seller/Servicer, a Multifamily Accelerated Processing and Section 232 LEAN lender for HUD and a Ginnie Mae issuer; and also services external portfolios of commercial real estate financing products.

The company competes with mortgage REITs, specialty finance companies, banks, mortgage bankers, insurance companies, mutual funds, institutional investors, investment banking firms, private funds and other lenders in the commercial real estate finance market. Competitive advantages include the external manager's credit platform, disciplined underwriting standards and the ability to originate loans directly. Its position is challenged by larger competitors that have greater financial resources and lower costs of capital.

The company serves commercial real estate borrowers such as owners, developers and investors seeking financing for property acquisition, refinancing or rehabilitation through its Commercial Real Estate Financing segment. Through its Agency Business segment it serves multifamily property owners and developers looking for agency backed financing and also services external portfolios of commercial real estate loans for various institutional investors.